Earlier this year, the Fair Work Commission (FWC) introduced significant revisions to the Professional Employees Award 2020, affecting penalty rates, overtime, and coverage clarification. These changes are set to have an impact on various industries, and as a business owner, it’s essential to be prepared.

Who does the Award apply to?

The Professional Employees Award 2020 applies to several categories including employers:

  • With employees performing professional engineering and professional scientific duties, falling under the classifications in Schedule A of the Award.
  • Primarily engaged in the information technology, quality auditing, or telecommunications services industry and their employees within the classifications in Schedule A.
  • Primarily engaged as medical research institutes, with employees performing professional medical research duties as per Schedule B.

What are the current overtime and penalty rate provisions?

Currently, the Award does not specify fixed penalty rates for regular work exceeding ordinary hours. Employers have the discretion to compensate this work through various means such as additional leave, remuneration, allowances, or adjustments to annual remuneration.

What are the upcoming changes and what are the implications?

Effective from 16 September 2023, the following changes will commence:

Overtime Compensation

Employees working beyond 38 hours per week will be entitled to overtime pay or time off in lieu.

Penalty Rates

Distinct penalty rates will apply based on work hours.

  • 125% penalty rate for work before 6.00 am and after 10.00 pm from Monday to Saturday (150% for casual employees).
  • 150% penalty rate for work on Sundays and public holidays (175% for casual employees).

Record Keeping

Employers must accurately document employees’ hours beyond 38 hours per week or during periods when new penalty rates are in effect.

Exemptions

Employees with contractual entitlement to an annual salary at least 25% above the minimum wage for their classification under the Award will be exempt from these provisions.

What should employers do to ensure compliance?

As a proactive business owner, we recommend the following to prepare for the changes:

Assess Coverage – Determine if the business falls within the Award’s scope.

Review Remuneration – Evaluate employee salaries and remuneration packages to align with the new penalty rates and overtime entitlements.

Update Contracts – Revise employment contracts to reflect the revised Award terms and integrate updated entitlements.

Update Payroll Systems – Modify payroll systems to incorporate the new penalty rates and overtime calculations.

Our team can assist your business to taking timely action to review and adjust employment arrangements and payroll systems prior to 16 September 2023. Get in touch for an obligation free chat now, we can help.

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